Page 182 - Quick Insights Book 2022

Ann. 15 – ICAI Rules of Merger & Demerger of CA Firms

member firm of the network can accept 12. Exit From Network:
appointment as an auditor in place of any
member firm of the network which is retiring. A constituent Member firm/Member of a Network can exit
However, this restriction shall not apply in from the network by sending the declaration in Form `C’
case of appointment as Statutory Central (enclosed) to the Institute and also to each and every
Auditor of Government agencies/Undertakings constituent of the network. The concurrence/acceptance
such as Public Sector Undertakings (PSUs), of the same by other firms forming part of the network
Public Sector Banks and Financial Institutions firm shall not be required.
etc.
13. Framework of Internal Byelaws of Network requiring
(d) The Constituent member firms of a Network Registration:
& the Network shall comply with all the
Ethical Standards prescribed by the Council To streamline the networking, a network shall formulate
from time to time. operational byelaws. Byelaws may contain the following
clauses on which the affiliates of the network may enter
into a written agreement among themselves:
6. Consent of Client:
(i) Appointment of a Managing Committee, from
The network shall obtain consent of the client to engage
an affiliate in discharging the professional assignments. among the managing partners of the member
firms of the network and the terms and conditions
under which it should function. The minimum and
7. Constitution of Network:
maximum number of members of the Managing
(i) Proprietory/partnership firm(s) as well as individual Committee shall also be agreed upon.
member(s) are permitted to form a Network.
(ii) Administration of the network
(ii) A proprietory/partnership firm as well as individual (iii) Contribution of membership fees to meet the cost
Member are allowed to join only one Formal of the administration of the network.
network.
(iv) Identifying a partner of any of the member firms of
(iii) Firms having common partners shall join only one
network. the network to be responsible for the assignment
(engagement partner)
8. Object of Network: (v) Dispute settlement procedures through arbitration
and conciliation
The Network itself will not carry on any business for
acquisition of gain for itself and only act as a facilitator (vi) Development of training materials for members of
for its members/constituent Member firms to pursue their the network
professional jobs.
(vii) Issue of News-letters for staff and clients
9. Responding to Enquiries: (viii) Development of softwares for different types of
assignments
Only one firm/Member can apply on behalf of the
network showing the collective strength of all the (ix) Development and maintenance of data bases
constituent firms of the network, when responding to relevant for different types of assignments
any enquiry.
(x) Library
10. Issuing Reports: (xi) Appointment of a technical director to whom
Only the firm(s)/Member(s) forming Network are eligible references can be made
to issue/sign/attest any certificate/Report/professional (xii) Determining the methodology for drawing resources
document/assignment. from each member firm

11. Violation of Act: (xiii) Determining compensation to member firms for
resources to be drawn from them
In case of alleged violation of the provisions of the Act,
Regulations framed thereunder, guidelines/directions laid (xiv) Peer review of the member firms These clauses
down by the Council from time to time and Code of are illustrative.
Ethics by the Network firm, the proprietory/partnership
firm(s)/individual Member constituting the Network would
be answerable.

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